Control refers to various behaviors that reduce risk cost by reducing risk loss probability and risk loss degree (scale).
(1) Use of Hedging measures During the transaction negotiation, the buyer and the seller shall, through consultation, enter into appropriate hedging terms in the transaction contract to prevent the risk of change.
In foreign exchange risk management, the currency preservation measures mainly include gold preservation clause, hard currency preservation clause and preservation clause.
(2) The selection of favorable denomination currency should follow the following principles: First, in the case of single currency denomination, soft currency is used for payment and hard currency is used for receipt.
A soft currency is a currency that tends to depreciate or is under greater pressure to depreciate.
A hard currency is one that tends to appreciate or stabilize;
Second, in the import and export trade, a variety of currencies are used as the currency of valuation and settlement, so that the risks of exchange rate fluctuations of various currencies offset each other.
Third, in trade practice, the payment should be made in local currency as much as possible through negotiation and negotiation, that is, the exporter gets the local currency fund and the importer makes the payment in local currency.
(3) Advance or delay in the balance of payments, enterprises can offset the foreign exchange risk management by predicting the change trend of payment and receiving and paying foreign exchange in advance or delay.
(4) Combination of import and export trade. First, counter trade law connects import trade with export trade for goods exchange.
The second is the automatic offsetting method, in which an importer and exporter conducts export trade and import trade at the same time, and tries to use the same currency for valuation and settlement, trying to adjust the receipt and receipt time, so that the import offset the export foreign exchange position, so as to implement the automatic offsetting of foreign exchange risk management.
(5) The use of foreign exchange derivative products such as signing contracts, that is, import and export enterprises after the contract is signed, denominated in foreign exchange accounts payable or receivables with the bank for forward purchase or sale of foreign exchange goods, by locking exchange rate fluctuations to carry out foreign exchange risk management, eliminate foreign exchange risk.
